Wednesday, January 9, 2019

Government Says Army Has Enough Funds To Pay For Emergency Procurement

Government Says Army Has Enough Funds To Pay For Emergency Procurement

NEW DELHI: The defence ministry is in contention with the previous army Vice Chief, Lieutenant General Sarath Chand. It has said that it disagrees with his assertion that the army doesn’t have enough money to pay for emergency procurement, on-going schemes and strategic roads along the China border, adding that the army has been surrendering funds due to slippages in contractual obligations.

The ministry has also said that the requirements of the army will be evaluated and taken up with the Finance Ministry, based on the threat perception, prioritisation and “pace of expenditure”.

The development came to light in a report tabled by the Parliamentary Standing Committee on Defence on Monday. Last year, Chand during his tenure as the Vice Chief had deposed to the Committee, stating that the defence budget of 2018-19 “has dashed our hopes” and the marginal increase in it barely accounts for inflation and doesn’t cater for taxes. His deposition was released by the Committee in a report tabled in Parliament in March last year.

Chand had also stated that the allocation of Rs. 21,338 Crore for modernisation is insufficient even to cater for committed payment for 125 on-going schemes, emergency procurement, 10 (I) (weaponry for 10 days of intense war), ‘Make in India’ projects, infrastructural development and the strategic partnership policy of foreign and Indian companies.

He had also explained that 68 per cent of the army’s equipment is in the vintage category, when it should be just one-third. “In the Army we are looking forward to manufacturing the future ready combat vehicle and Future Infantry Combat Vehicles through these schemes (read as Strategic Partnership model). However, with the kind of Budget that has been allocated, this may get delayed by a few years,” he said.

The situation was equally bad for the strategic roads and infrastructure development along the northern borders. “For these infrastructure development, the allocation is falling short by around Rs. 902 Crore from what we have demanded. So, there is an overall shortfall of around Rs. 12,296 Crore as far as capital is concerned,” he had said.

Now, in the latest Committee report the ministry said it, “does not agree with the contention of the Vice Chief of Army Staff... the Army has been surrendering funds on capital account regularly in the past except last two years with an average expenditure of Rs. 15,664.72 crore against an average allocation of rate 18,608.85 crore per annum.”

The ministry said that from 2012 to 2016 the army has surrendered an amount of Rs. 20,386.57 crore due to slippages in contractual obligations.

The committee also noted that data given by the ministry points to “lower absorption capacity” of the allocated amounts in the past by the army. “The Committee, therefore, are of the view that the projections of the services may be made more realistic after taking into their absorption capacity and at the same time allocations should be enough to ensure that critical requirements of the services are met,” reads the report.